As the largest insurance provider in the United Kingdom and the fifth largest insurance group in the world, Aviva has many supplier relationships that we value and must work hard to maintain. Prior to joining OB10’s e-Invoicing network, we processed 100 percent of our invoices manually and dedicated 10 full-time employees to the tasks of processing and data entry of all those invoices. This led to a significant number of errors and when coupled with lost or misdirected invoices, our supplier relationships suffered. Our primary challenges included:
- Suppliers consistently not getting paid on time
- No audit trail in which to keep track of invoices
- Supplier relationships in jeopardy
Lowering the cost of processing invoices, archiving them and ensuring that our supplier relationships were preserved by paying our invoices on time were among our key objectives. We considered several solutions such as scanning, OCR and others, but ultimately it was OB10’s experience with our existing Oracle and workflow systems, its reputation for handling supplier enrollment and its global capabilities that lead us to e-Invoicing. OB10 made sure that their
e-Invoicing network fit in with our existing systems, which made it incredibly easy for us to move from receiving paper invoices to electronic invoicing.
Reducing costs while delivering value
Initially we set out to reduce the overall cost of invoicing and pay our suppliers on time by having at least 66 percent of our invoices processed electronically. To do this, OB10 managed a series of supplier enrollment campaigns for suppliers that submit 12 or more invoices per year. As a result, we quickly achieved 55 percent of our invoices being processed electronically. In the last month, we have achieved just over 65 percent electronic and are now heading toward 70 percent.
One of the key reasons our suppliers agree so readily to join the OB10 network is that OB10 allows our suppliers to send and receive data in any format they choose, without having to install any software or hardware. This makes adoption by even the smallest of suppliers simple and pain free.
With OB10’s online archive we are able to reduce costs even further. Along with the invoice data, OB10 creates a digitally signed invoice image that is compliant with tax requirements. A copy of the digitally signed invoice image is sent to us as well as our suppliers and stored in the OB10 archive. This gives us 24/7 access to use the images for workflow and tax audit purposes.
Finally, we’ve been able to improve operations costs by redirecting employees from the Accounts Payable team and reallocating them to other areas of the company where they are delivering more value to the overall organization.
Since joining the OB10 network we’ve seen our relationship with suppliers improve. Additionally, the cut in costs has been a huge benefit. Obviously in the current climate your overheads are always a concern, and the fact that we have managed to reduce them while improving efficiency is a credit to OB10.
Due to the tremendous success we’ve had with OB10, we are looking to expand our use of OB10’s e-Invoice network globally. We believe that we will be able to easily transfer benefits we’ve experienced and cut costs even further as well as improve supplier relationships.
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Donna's morning coffee:
Getting the right information from vendors means digging into the details
In my last morning coffee I promised I would provide guidance on asking the right questions when getting information from vendors during your solution selection process.
Because there are multiple vendors selling what seems to be the same service, it’s common - and very tempting - for solution seekers to choose the free or least costly service without adequate due diligence. So, read on if you’re committed to finding the best solution for your organization and properly analyzing the details behind the pricing for such services.
Start with your suppliers
You have hundreds, even thousands, of suppliers yet there are no industry standards for invoice format or layout. In addition, each company’s list of suppliers consists of vendors ranging from small mom-and-pop shops invoicing a single customer to large global suppliers invoicing hundreds or thousands of customers. Without addressing the supplier side, you’ll suffer from a low adoption rate and receive paltry electronic invoice receipt levels, so none of it will matter. So, put yourself in your suppliers’ shoes and evaluate vendor offerings from their perspective by considering five questions.
Question 1: How will a vendor solution engage all of your suppliers?
The best practice for organizations considering an e-Invoicing solution is to ensure the vendor offers multiple ways for suppliers to submit invoices.
Ask the vendor if they have an electronic solution that will allow high volume suppliers to automatically submit invoices. If you already have EDI, ask them if they have an option that takes advantage of your current EDI set up so you don’t have to reinvent the wheel. If they do, ask them to provide you with details about how it actually works.
When addressing what to do about smaller volume suppliers, ask the vendor if they also offer an online portal that will easily allow suppliers to log in and submit a handful of invoices easily and quickly. If the answer is yes, ask them to demonstrate it for you, keeping in mind that it should be fairly easy to use and straightforward.
Once you’ve gathered information about these submission options, ask them what they would do about any residual paper invoices. A third option, such as an invoice data capture alternative that pulls data from any residual paper invoices, might be valuable for suppliers that don’t fit the automated or portal route. If this option is also available, make sure that the invoice data is treated the same way the automatic and portal data is: validated and delivered directly into your ERP system in a way that reduces exceptions and streamlines the approval and payment process.
Supplier submission options are important. The more submission options you offer, the more suppliers can participate in your electronic initiative and the faster you can meet your objectives.
Question 2: How will a vendor get suppliers ready to send you electronic invoices?
Preparing suppliers to send you electronic invoices is like hosting a party. You can invest as much money as you want on food, music and festivities - all for the enjoyment of your guests. However, if you don’t actually invite the guests, if you don’t figure out how you will send the invitations, if you don’t ensure it gets to the right person and if you don’t have a process to follow up on those who do not RVSP, how do you know how much margarita mix to buy for the party?
It’s the same for getting suppliers to send you invoices. When evaluating various solutions, dig into the details as if you’re hosting a party.
Regardless of which solution you choose, the question remains the same: how will a vendor handle communications with the suppliers? Do they communicate the initiative as being mandatory or optional? How do they track their communications? Do they have a process to call suppliers if e-mail communications go unanswered? What happens if your suppliers don’t answer or return calls? For those that do enroll in the initiative, how will the vendor field questions about the service? How do all of these things impact your budget?
Suppliers are busy. You’re busy. Because of this, you should know in advance how the vendor will handle each of these issues. Ask them if there is a contact management system in place to help enroll the hundreds or thousands of suppliers. If they don’t have such a tool in place, ask them how they plan on managing the process? Also ask the vendor how they plan on properly fielding inquiries and support questions about the service.
Whether you’re looking at vendors you are very familiar with or you’re considering a new player, your job is to dig into the details to understand everything that is required to undertake an e-Invoicing initiative.
In my next installment, I will cover the remaining three questions to cover with a vendor; which suppliers should be in scope, what percentage of invoices should you realistically expect to convert to electronic and how do you determine what your suppliers are currently doing in terms of submitting invoices electronically?
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